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ACCA Strategic Professional · Advanced Taxation (UK) · Ethical and professional issues arising from the giving of tax planning advice

An ACCA member is asked by a client to advise on a tax planning scheme that is lawful but aggressive and marketed as having a high chance of challenge by HMRC. Which action is consistent with the member's professional obligations?

The member should advise on the scheme while clearly explaining the risks, the likelihood of HMRC challenge and any limits to the advice, and should only rely on a technically supportable position. Omitting risks breaches professional competence, while refusing all planning advice is unnecessary.

  1. ARecommend the scheme without explaining any risks, since the client requested it
  2. BRefuse to give any advice on tax planning because it is unethical
  3. CAdvise only on the scheme's tax savings and omit potential penalties to avoid discouraging the client
  4. DAdvise on the scheme with a clear explanation of the risks, the possible HMRC challenge and the limits of the advice, and ensure it is based on a technically supportable positionCorrect

Explanation

Members may advise on lawful planning but must act with professional competence and objectivity and make the client aware of risks and uncertainty. Advice should not rely on unsupportable positions. Omitting risks or refusing all planning advice is not required by the guidance.

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